• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Borders Bookseller Goes Belly Up, but Save Your Tears

    The slow, painful end of Borders bookstores has finally arrived. After filing for Chapter 11 bankruptcy protection in February and taking actions to save the company, the 40-year-old chain with locations across the country will begin liquidation on Friday. All told, 399 stores will close, and 10,700 workers will lose their jobs.

    For those who enjoyed perusing Borders’s aisles of books, shopping its bargain bins, listening to music, or sipping coffee in its cafes, the company’s closing will come as a loss, but its end is a story of how capitalism really works.

    Borders got its start in Michigan and became an innovator in its industry. It is credited by some with popularizing the super bookstore, but ironically enough, it is criticized for putting independent bookstores out of business.

    But the book business has changed radically since Borders hit its zenith. Amazon.com came on the scene, as did its Kindle e-reader. The result? Consumers can purchase more books at a fraction of Borders’s price—all without having to travel to a store, wait in line, sort through shelves, and be disappointed when the book they want is out of stock.

    Meanwhile, Borders failed to innovate, made poor business decisions, over-expanded, was late to the e-reader game, and hasn’t made a profit in five years. In short, like the independent bookstores Borders supposedly helped put out of business, it just could not compete in the marketplace. That’s capitalism.

    And that’s what many are lamenting. Detroit Free Press columnist Mitch Albom gushed over Borders’s “magic” and the decline of “the American bookstore,” remarking:

    The problem is people don’t love books the way they once did, nor do they read them the same way. Cheaper electronic versions undermine the need for shelf-space. Younger audiences who haven’t grown up with rainy afternoons spent inside book pages, don’t snap up the latest great read—unless there’s a certain vampire or wizard attached. The backlists of mid-level authors are not lucrative for the balance sheet. And the pressure for profits to keep the stock price high runs diametrically opposite to the slow, meandering, long-term customer approach that used to define bookstores.

    Actually, people still love books. But they’re buying them online in droves because they get more for their money—without having to pay sales tax. Amazon boasts of catalog of 900,000 books in its Kindle store, and the company posted $9.86 billion in sales in the first quarter of 2011—up 38 percent from last year. And, by the way, it also creates jobs—unlike Borders, which has just lost them by the thousands.

    With its relative success, Amazon may as well paint a target on its back. The same people who criticized Borders for gobbling up independent bookstores are attacking Amazon for putting their newly beloved Borders out of business.

    Are those critics hopeless romantics, nostalgic for a bygone era? Is it success they loathe? The slaughtering of outdated sacred cows? Or is it that they love failed industries that can’t stand on their own two feet? Undoubtedly, some read books on Kindles or listen to music on iPods. They probably get movies in the mail or online via Netflix. Some may even work for the companies that provide those new services. They enjoy the fruits of the free market, all while attacking its mechanics.

    Borders had a failed business model whose time had expired. Some might miss browsing its rows of costly new books or obsolete CDs and DVDs, but something better and cheaper has taken its place.

    Posted in Economics [slideshow_deploy]

    20 Responses to Borders Bookseller Goes Belly Up, but Save Your Tears

    1. nobody says:

      Just like Blockbuster Video- its time has come and gone. Capitalism in action. Love it.

    2. Euro Conservative says:

      Funny. The quoted piece by Mr Albom could not in fact be more conservative. Just shows how off the mark Americans calling themselves "conservavatives" really are today. Mike Brownfield probably regards himself as a conservative but in reality is a techno-obsessed liberal progressivist worshipping the golden calf of capitalism. Very unconservative. Btw, wasn't it the greatest American conservative of the past century, Russell Kirk, who called the car a "mechanical Jacobin"?

      • Mike Brownfield Mike Brownfield says:

        I'm not sure under what grounds Mr. Albom's column could be considered conservative. Lamenting the loss of a company that failed to compete isn't "conservative" – it's nostalgic affection for a dinosaur that couldn't compete in the free market.

        Though Albom acknowledges that market conditions have changed (which is an observation of facts, not commentary), he doesn't see that as a good thing – he sees it as something to pity. Quoth Albom, "The pressure for profits to keep the stock price high runs diametrically opposite to the slow, meandering, long-term customer approach that used to define bookstores."

        Conservatives prize capitalism and innovation—and they don't wring their hands when the market functions as intended.

      • Mike Brownfield Mike Brownfield says:

        I'm not sure under what grounds Mr. Albom's column could be considered conservative. Lamenting the loss of a company that failed to compete isn't "conservative" – it's nostalgic affection for a dinosaur that couldn't compete in the free market.

        Though Albom acknowledges that market conditions have changed (which is an observation of facts, not commentary), he doesn't see that as a good thing – he sees it as something to pity. Quoth Albom, "The pressure for profits to keep the stock price high runs diametrically opposite to the slow, meandering, long-term customer approach that used to define bookstores."

        Conservatives prize capitalism and innovation—and they don't wring their hands when the market functions as intended.

    3. JBBnntt says:

      Wouldn't you know it? I just recently bought Border's Nook (like Kindle). I wonder if it's now obsolete. I wonder if Kindle books can be downloaded to a Nook?

    4. JDusek says:

      This same concept also applies to public libraries. Our city closed several libraries last year after voters rejected a proposal to raise taxes specifically to jeep them open. Now, there's a move to raise taxes again to reopen one of them. Libraries no longer serve the purpose they once did, and keeping them going to the same degree is a waste of taxpayer money. This article will help in my fight against the tax increase!

    5. Guest says:

      Cheaper does not always make it better, Mr. Brownfield. Call me a curmudgeon, but I still prefer my music on CD, and my books in paper format. CD's sound better than e-music, and I enjoy the heft, feel, and smell of a new book, just waiting for the covers to be turned. Which is why I'm trying to buy all the Classics in book form, and some more music in CD format as fast as I can before "progress" can take them away from me.

    6. Jim says:

      I do have a conservative perspective on this. I am a book fanatic and love to shop most any book store including Borders of course. Several years ago I noticed that I could not find consevative books, newly released best sellers, at Borders.One day I had two managers attempt to find a new conservative book without any success. We walked by 4 different stacks/displays of the latest Al Franken POS , easliy a couple hundred copies, and finally the store manager offered to put me on the waiting list for the next shipment . She said they would get another 14 copies in a couple days and warned they would all be sold prior to arrival. I asked why they would only order 14 of such a hot seller and she told me all of those decisions were made in New York. I started paying closer attention to this issue and it happens all the time. I wonder why companies run by liberals , including Hollywood movies, would allow their ideology to drive away around half of their potential customers. It seems like a bad business strategy and I wonder if it played a part in Borders demise.

    7. Lloyd Scallan says:

      Despite the tragic loss of 10,700 jobs, every time I went into a local Borders store and asked for any book that would be considered conservative, I was looked by the freakish clerk like I had a disgusting growth in the middle of my face and told they do not carry that item. Sorry for the loss of jobs, but as far as Borders, good reddens!.

    8. Brad - Detroit says:

      Mitch Albom is still bemoaning the passing of the buggy whip manufacturers. Oh, the good old days !
      My biggest beef with Mitch is that he comes on at 5PM in Detroit and I miss the last hour of Sean Hannity's show. Instead, I have to listen to Mitch talk about himself. (Actually, I usually switch over to the Sports Talk shows so I don't have to hear about Mitch tell everyone how great he is. . . .)

    9. Mike, Wichita Falls says:

      Let us rejoice that they are neither clamoring for, nor is Congress debating, a taxpayer bailout. Well, at least I haven't heard so.

      If Borders were a government agency, their CEO would have simply asked Congress for more money to keep the doors open and not have to fire anyone from shuffling papers. Heaven forbid any government worker lose their job. These 10K+ former Borders employees can look forward to 99 weeks of unemployment though…more minds turning to mush.

      Regarding a post on libraries…why can't struggling libraries simply impose or raise fees to keep themselves in the black or at least out of the red? If a library insists on public funding, they should first implement fee-for-use not fee-for-existence.

    10. Kelly Crist says:

      I'll enter the fray. Years ago I would buy the American Spectator magazine and it became increasingly difficult to find it retail anywhere. The liberal bias couldn't be more clear.

    11. Bobbie says:

      I'd much rather have books! Electronics malfunction…
      hey and according to the EPA, cause man-made global warming!!!!!!
      In a couple years? forced to give up your electronic book where there will be no more reading but what government mandates??

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×